Commerce Minister Chen Deming said yesterday the government's rejection of Coca-Cola's $2.4 billion bid to acquire China Huiyuan Juice Group is not protectionist.

Chen said both are foreign companies - although Huiyuan operates mostly in China, it is registered in the Carmen Islands and listed in Hong Kong.

Coca-Cola, the US beverage giant, made a bid to acquire the largest fruit juice maker in China, but its attempt was blocked by the ministry on anti-trust grounds.

The ruling fanned speculation that China will use the anti-monopoly law to fend off foreign attempts to buy domestic firms.

"This is a big misunderstanding ... One should be able to distinguish between foreign investment and market protectionism," Chen said in his first reaction to the blocked deal.

He repeated the government's objection that a tie-up would have been bad for competition and hurt consumer choice.

"We still hope that both Coke and Huiyuan can develop healthily in China."